The European Union has launched two World Trade Organization disputes against India and Turkey, respectively targeting unlawful import duties on ICT products and pharmaceuticals. Large economic interests and important legal principles are at stake in both cases for the EU. Affected EU exports are estimated to be worth than €1-billion annually.
Photo by Artur Roman
Commissioner for Trade Cecilia Malmström said: "Today the EU is showing once again that it will not hesitate to use the multilateral system to enforce the rules when others violate them. India must abide by its own commitment to allow duty free trade in ICT products. Technological innovation keeps our companies competitive in the global market and supports hundreds of thousands of high value jobs across Europe. Turkey is discriminating against EU pharmaceuticals producers by forcing them to move production there. This is a clear violation of WTO rules and puts many EU jobs at risk. We hope that we will be able to resolve both cases during the upcoming WTO consultations."
In the case against India, the EU is challenging the introduction of import tariffs on certain Information and Communication Technology (ICT), such as mobile phone components, base stations, optical instruments and integrated circuits. India has been applying duties from between 7% and 20% on these products despite an earlier legally binding commitment. The EU estimates the levies affect exports to the tune of around €600-million a year.
In the case against Turkey, the EU is concerned about measures that require foreign manufacturers of pharmaceuticals to move production to the country if they want their products to be eligible for reimbursement under the Turkish health care system. On top of this, Turkey has applied a number of technology transfer requirements when the move is made. The EU argues that this is a clear violation of Turkey's WTO obligations to treat foreign companies on an equal footing with domestic ones as well as protecting intellectual property. The estimated value of pharmaceutical exports affected by the measures is €460-million. If implemented further that figure could rise to more than €2.5-billion.
The first step on a WTO dispute settlement is a 60 day consultation period. If the consultations do not resolve the issues, the EU can request a WTO panel ruling on the cases.
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